28 July 2019
By Elaine Murphy
Fianna Fáil Spokesperson on Finance, Michael McGrath TD, has encouraged people who think they may have overpaid income tax to request an End of Year Statement (P21 Balancing Statement) from the Revenue.
His comments come as it has emerged that nearly €4 billion of overpaid income tax has been claimed back from the Revenue Commissioners since 2010. In the same period, the Revenue recouped almost €1bn in underpaid tax from taxpayers.
Deputy McGrath commented, “While some of this €4bn refunded to taxpayers relates to tax relief being claimed on health expenses, nursing home fees and other allowable expenses, a significant amount of it was only repaid because the person sought a P21 balancing statement at the end of the tax year. It is almost certainly the case that many taxpayers have overpaid income tax in previous years and wrongly assume to this day that this will be automatically paid back to them.
“People may have overpaid tax, for example, because their tax credits were not correctly applied or because they did not claim all the credits or reliefs they were entitled to. People who changed employment during the year or couples who were not being assessed in the right way may also have been overpaying tax. The government and Revenue should lead an information campaign to make people more aware of credits such as the Home Carer Tax Credit and reliefs for third level tuition fees.
“The new PAYE Modernisation system in place since January 2019 should now automatically correct most overpayments or underpayments of income tax, but this system was not in place for previous years. Taxpayers should be aware of the four-year rule for claiming back any overpaid tax. For example, claims for 2015 must be made by 31 December 2019. Claims made after this time will not be repaid. Therefore, it is open to taxpayers now to seek a P21 Balancing Statement for the years 2015 to 2018.
“I would encourage people to look at the income tax they have paid over the last four years and if they believe that they have overpaid in those years, through their employer, they should seek a refund from the Revenue by requesting a P21 Balancing Statement. Information on how to do this can be found on the Revenue Commissioners’ online service at www.ros.ie”, concluded McGrath